surely large, rent-seeking corporations that take advantage of corporate tax breaks ARE the logical conclusion of free market capitalism? I don’t see how you can say it’s not the failure of capitalism or at least the form of capitalism that has dominated the global economy since the 80s.

This is a semantic debate.

What you describe is not free market capitalism but pro-statist corporatism.

I bet if they made good cars and consistently kept their expenses below their earnings, they might actually be able to survive on their own. Whatever happened to good old-fashioned capitalism and having to make money to stay in business? Did Ford, GM, and Chrysler just now figure out that they havenâ€™t been turning a profit in years?

WOW!! Let’s talk about some facts please!!! Why is it the wages are above average/high(depending on who you ask)? Inflation! I have some experience in negotiating labor contracts, and the wage increases are ALWAYS tied to inflation!!! If the longterm average inflation is 3.1%, then that is the goal for the wage increase. Find an inflation calculator on the internet and put in $5.00 per/hour in 1980 and see what the amount is for 2008 if you don’t believe me. Earlier this year the government said the CPI(inflation) was 4.5-5%, so if you don’t increase wages by the average or overall rate for the year, you lose buying power of your wages. But, inflation also affects other prices as well that determine the cost of a vehicle. Then there is the lobbying, and marketing costs. Anyone ever been to an auto show? Talk about over the top expense! Now factor in NASCAR sponsorship/parts supply and it adds up fast.
In 2005 a local Chrysler plant expanded and added three more products to their assembly line. I don’t remember the exact amount, but $18 million comes to mind for the state subsidy for keeping the plant here. Alabama, I believe has 7 auto assembly plants in that state. I recently read an article about Mercedes Benz building a plant there in 1990-91 that had $220,000.00 in state and federal subsidies for every job created. The lower the wage, the lower the taxes that are collected from each of those jobs, how long did it take to PAY THAT BACK? A republican senator from that state was on numerous media shows complaing about unions, but conveniently forgot about begging for government money for those plants in his state. The ironic part is his supposedly credible opinion(AND VERY BIASED) about how to run a very large global corporation, considering he has spent roughly 30 years as a politician!!
ON CNBC, 12/15/08 @ 1:25 p.m. central time on the “STREET SIGNS” show, they showed the pay scales for the auto manufactorers, from UAW.org, and the Center for Automtive Research. They are:
UAW wages; new hire- $14.00 per/hour
assemblers- $28.00 per/hour
skilled trades- $33.00 per/hour (I don’t know what these are)
Benefits are $10.00 per/hour per/job

Toyota- $30.00 per/hour
Honda- $28.87 per/hour
Nissan- $25.00 per/hour
The UAW President has said that labor or wages are 10% of the total cost of manufacturing. There really is not much difference between foriegn and domestic.
Now let’s talk about “legacy” costs. Most of those costs are pension contributions that HAVE NOT been fully paid yet. They were earned, but because of various “loopholes” and corporate/IRS schemes they were not paid, but now they must be made up. The amounts that are owed are:
GM- $7 billion
Ford- $4.4 billion
Chrysler- $3.5 billion
Let’s also consider executive pay, or compensation. Most of that is deferred or paid to a pension account for the executive, and cannot be written off until it is actually paid out. Not to mention the fact that most pay-packages include tax payment on behalf of the executive, numerous perks that also have the direct cost and the tax paid by the company(private use of corporate planes) and the only ones that are pulicized are the CEO and the top 5 executives.
Add to this the amount of debt that these corporations have. Now they want MORE debt!! These companies are run by some people that are not very forward looking either. GM just shut down a plant in Wisconsin that made SUV’s recently, and that it was scheduled to be shut down a year from now. The public quit buying those SUV’s awhile ago when gas prices skyrocketed, but they kept making them! It wasn’t like the spike up in gas prices was a temporary thing either, it has jumped up since the Spring of 2000.
Well, now that we have some FACTS out in the open, let’s look at the core issue of the problem. NOBODY IS BUYING CARS!!!!! Foriegn and domestic both make good cars, and different models have different problems. I personally know people that own cars that have very high mileage on them, both foreign and domestic. The “credit crunch” or the lack of available financing to purchase a new car/truck might be an issue, but noone has addressed the fact that the economy is tanking as I type this. How many people are out shopping for a new car or truck or buying one if they aren’t sure if they will have a job next month?
There has been a lot of theatrics by quite a few politicians as to the mode of transpertation to the congressional comittee hearings, to the republican media blitz about union wages. This is not a new thing inthe republican bag of tricks. Good ole union-busting has always been a mainstay of the republican party, just as much as sucking up to organized labor(unions) by democrats. There have been a lot of stupid questions asked by our elected politicians, and quite a few that were not. It’s a shame that they didn’t ask the same questions or make the same demands of wall street. Look at the waste and abuse of federal funds there. Today the bailout amount was stated as $17 billion, and it is supposedly a loan, although it doesn’t have the same demands as conventional financing, like that criteria you and I have to adhere to.
The only thing this whole bailout b.s. is missing is sex! Give it some time…..there are politicians involved!!

At first look the ad made me laugh, then it made me cry because of the element of truth to it.
After reading the comments I felt I couldn’t add anything intelligent to the wonderful comments already posted. Then I remembered something, the fear of what may happen is generally the worse part. when there isn’t anything but 2 cans of cat-food left in the cupboard You find that adding a little barbecue sauce to it makes it a little more palatable, you discover that you can shower pretty good with 1 or 2 gallons of cold water from a bucket.
When I learned to walk I fell a few times but I kept getting back up, same thing when I lost everything in the past, I kept getting back up.
Oh, I don’t guess I’m really in a bailout frame of mind either.

Of course we’re going to have to bail them out and of course my heart goes out to the workers, both directly and indirectly employed by the auto industry, impacted by the this mess, but as someone who has to rent a pretty wide variety of American cars, I really just want one that doesn’t have some design aspect that pisses me off every time I drive the thing.
It’s basic psychology. You can put the best drive train in the universe in the car, but if it has…oh…say, a cruise control dongle underneath the steering wheel that gets in the way every time you steer, like this Dodge Avenger that I rented yesterday, that’s the part of the experience you are going to walk away with.
On the other hand, I hear those private jets are very, very comfortable.

Not quite the failure of Capitalism, but surely the end-stages of it; yes, like cancer and yes, I’ve lost a loved one to it and can speak its’ name. How many Detroit-killers here are Middle/Upper Middle class, drive incessantly, or live in urban Paradises which allow them to forego combustion perambulation? Ashamed to raise your hands? How many jingos actually want to see our last major manufacturing sector go belly-up just to sneer at their bloated, stinking corpse? And yes the ad is funny. I hear the sound of Millions of Europeans and Asians laughing hysterically. Not so much on these shores. No one said the end-times would be easy.

You’d take a Miata in a heartbeat, a car that was made possible because of Ford’s large cash and engineering infusion in to Mazda in the ’80s.

@ #39

If you can’t guess at what Chrysler’s financials look like by looking at Ford’s Income statement, Balance sheet, and cash flow statement; or GM’s Income, Balance, and CF, then you ought not be giving such broad financial advice. But don’t worry, most of the highly-opinionated economic minds that we have running the show in Washington (and I use that as sarcastically as is possible) and most Americans really can’t read them either. Because they don’t care.

So many people in this country, even after this mind boggling failure in our economy, are content to sit at the sidelines and vote with their gut rather than any sense of REAL knowledge of the economy.

People see fit to whittle the problem down in to a set of problems having to do with up and down, gain and lose, and it simply cannot be solved from such a simplistic point of view.

“Permanently” destroying jobs is rhetorical nonsense. Better jobs will be created when other/new companies buy up that capital and labor force to put it to better use. The fact that this can’t happen until the “big 3″ go bankrupt is the problem.”

Free marketers have been saying this for over fifty years.

But it doesn’t happen. Better jobs are not created. The labor market was moved overseas. New companies are founded. But they are overseas. We simply lose the jobs. Wal-Mart jobs do not count. What jobs are created have no pension, health care that chains people to the company until they no longer needed, no job security, and damned poor wages.

A “free” market will leave most of America a welfare wasteland. The only winners will be the prison industry barons.

I remember a wealthy pundit investment broker on cable TV once lecturing the moderator that America would have to adjust to the fact that wages would have to come down to match the lowest in the world, and that people should get over it.
I noted he did not include himself. “Free market” ideologues never include themselves in those wage reductions.

There Ain’t No Such Thing As A Free Market, and never will be. Anyone who tells you the opposite is stealing something.

Actually, only two US car companies need a bailout — GM and Chrysler. Ford has said they can survive on their own, but if pie is being served, they’d like some please.

Ford is also the only US carmaker that has managed to get anywhere close to Toyota and Honda in engineering and build quality.

This is not a coincidence. Ford is still suffering from the well-deserved consumer skepticism generated by several decades of pumping out crap-mobiles, but if they keep it up they might eventually repair their reputation.

Also, all the people whinging about how the US customer DEMANDED huge land yacht and only huge land yachts are full of shit. Toyota, Honda, and Nissan have been making money hand over fist selling reliable, long-lived small to mid-sized cars to those same consumers for thirty years.

That’s terrifically entertaining, yes it is. The Detroit car companies are going bankrupt because the high-flyers on Wall Street managed to wreck the banking system with their fraudulent debt swaps and “A” ratings on bundles of mortgages which were chock full of sure defaults. They’re the ones responsible for causing a half million job losses last months alone, not only in the auto industry but in every other industry in the country. And they don’t get a paltry $25-billion – why, AIG burned up $25-billion in a single week, and were back for more the next – but $700-billion, twenty-eight times as much.

But I didn’t see a bunch of senators hectoring the executives of Goldman Sachs for arriving at Congressional hearings by private plane instead of bicycling or hitch-hiking or riding a Greyhound bus. And I won’t see twenty-eight times as many cutesy mock-ads decrying their bailout, will I? No, it’s not that anybody in power today cares about the money. They just calculate that if Washington deliberately lets the hedge fund crooks drive Detroit into bankruptcy, then it will break the UAW. From their point of view it’s well worth permanently destroying a half-million U.S. jobs if they can wreck a big labor union in the process. They don’t know anybody who works in a factory, after all.

Again, this represents a total lack of understanding of not only these issues in particular, but the American economy as a whole.

And as for the purely economic interests out there? The $15B, or even the whole $34B that the auto companies are asking for, is a mere drop in the bucket, compared to what it would cost the taxpayers if even one of the companies goes under. Beyond the unemployment that would need to be paid out, there is the federal guarantee of pensions, the additional folks added to medicaid/medicare, etc. etc. etc… amounting to hundreds of billions of dollars. If you want to talk economics, a bridge loan is a bargain, compared to the alternative.

As for “let them declare chapter 11″ folks? No one is going to buy a car from a bankrupt company. That is a fact, and it isn’t an option.

I currently drive an ’02 Focus. It’s got almost 60,000 miles on it, but then I don’t drive it that much anymore. Just to the Bus Station to commute into downtown, then pick up my kids in the afternoon and home again.

In a couple of years I’ll be trading it in. I’d love a Mustang but after sitting in one at the recent L.A. Auto Show, closing the door and hearing the chunky clunk? No, thank you.

Then I checked out the Honda Fit. Although the same price as a Mustang it was the superior vehicle all around (IMO), and will better suit my needs than the Mustang.

As much as I love the Pony Car, I cannot bring myself to buy one this time around. Maybe when I’m in my 50s I’ll get a classic Mustang. At least then the clunkiness would be excusable, and I can always blame the onset of senility for buying such an inappropriate vehicle.

Ford may be making better cars than yesteryear, but they took Dr. Deming’s advice far too late; they still have a lot of catching up to do.

Ed Deming. I’m glad someone finally brought him up. His strong feeling was that quality problems were overwhelmingly the fault of Management.
I’d like to add that the punishment for falling sales – in the form of layoffs and compensation givebacks – falls disproportionately on Labor.

So it’s ok to giggle as tens of thousands of IT, bank staff and other white collar professionals get fired without any benefits or compensation. It’s ok for trillions of dollars to be wiped out by the destruction of the Investment banking industry, but to ask that auto workers suffer the same..

I suppose it’s arguable that at least the auto workers are creating something of actual tangible value in contrast to the financial sector and its pyramid schemes, smoke and mirrors, and financial instruments.

To sum up: the stockholders, who demanded big returns and fat dividends, ate up the cash. The company bent over backwards to pump up the stock price by increasing sales by selling highway tanks. The stockholders were not interested in long term planning.

Americans wanted tanks. Oil was cheap. Americans screwed themselves over by forcing the Big 3 to produce tanks that are now cluttering up parking fields, unsold.

Oil traders jacked the prices up, screwing us all.

Oil companies refused to build a new refinery for over thirty years, despite the free tax money we toss at them in the way of special tax cuts, thus reducing capacity and raising prices.

Our Smartest Men in the Room, once again, Enronned us by playing games with markets, killing us and enriching themselves.

Bush’s ideologues deregulated what they could and ignored regulations that they couldn’t change. They take no responsibility for this: Bush blames Clinton.

We went to war against Iraq, per Cheney’s lies, and jacked the price of oil up by shutting off the spigot. I suspect that that was not a happy coincidence.

A lot of things happened, but they were mostly the collective stupidity, ideological blindness, and greed of the American people. Reality sucks.

I had a girlfriend once who actually witnessed first hand a Ford turning into a conflagration when it was rear-ended. She saw a whole family burned alive, minus the infant, which the father managed to get out (his flesh was by this point drooping from his arms, and he died in hospital a short while later).

I can’t understand for the life of me how many Americans WANT to see the Detroit auto makers fail.

YES they’ve made some shitty cars.
YES they’ve remained focused on gigantic luxury vehicles and ignored consumer demands for fuel-efficient economy cars.
YES their CEO-level compensation packages have been just as terrible as those in other major corporations.

But honestly, can we afford to let them fail?
With unemployment skyrocketing, can we afford to lose the millions of jobs wrapped up in the manufacture, sales, support, and supply of American automobiles?

They should be given the money.
The companies should undergo radical restructuring.
The corporate management should be replaced with leaders in the field from companies like Tesla Motors and ZAP! who have proven that they can create successful companies in a difficult market.

Instead of saying “THEY SCREWED UP! LET THEM FAIL!” we should be saying “THEY SCREWED UP! WE’RE GOING TO TAKE THEM OVER AND RUN THEM BETTER AND FORCE THEM TO START MAKING THE KINDS OF CARS THAT AMERICANS WANT!”

While the UAW might be a huge part of the problem, consider that GM was at the root of the problem. In contract negotiations with the UAW, GM was willing to agree to many UAW requests because they knew that Ford, Chrysler and AMC would have to follow suit. Since they were an order of magnitude larger (at the time), they had better margins and could absorb the increases. They gamed the system to harm the margins of the other automakers. Now the exhaust is in their faces.

I’d suspect as much. Her telling of the story didn’t exactly focus on the model, but later when I heard about Pintos, and the description of the crash (old-looking Ford got rear-ended and instantly burst into flames) I put two and two together.

Shitty cars? Please the Pacer and Gremlin where amazing pieces of car shaped,,er,mmm,er oh hell Crap! Best when AMC closed down they destroyed all of their parts inventory! Need a replacement part, good luck, suckers!

American car companies have built crap, over and over gave them a little gold plating and marketing and BlamO! Shiny pooh. I love the car show Top Gear, and love it when they review and American car, they do not pull their punches that’s for sure.

Have no fear. If you go to Hummer.com, you’ll find a button that says “Help Support the US Auto Industry.” Click it and you’ll be taken to a site that auto-generates forms to Congress in favor of the bailout.

I think that what the American manufacturing industry needs is it’s own Michael Pollan–someone who will make the American manufacturing industry cool again. The reality is that American cars are no more “shitty” than foreign cars, and haven’t been for decades. In the last few years, in fact, American cars have been outperforming foreign cars in a number of areas. The perception in people’s minds is difficult to change, however.

I’m disapointed in this site for all of this anti-manufacturing bias, as well. I’ll leave it at that, but it’s amazing to me that the huge bailout of the financial sector got much less negative review than the automotive manufacturers, and significantly less if we factor out the negative-press-per-dollar, since the financial industry got $700 Billion, vs the auto industry’s $25 Billion.

Additionally, there is actually a falsehood in this kind of post: The money for the American manufacturers is a loan, not a bailout. The last time that the American car companies got a loan, people said the same thing: The companies wouldn’t pay it back, and so on. The federal government made $800 million on those loans as well. Again, compare that to the financial bailout–money that the feds will never see again.

I am not defending GM and those other buffoons totally but I have to say they have built some great cars in the last 10 years. For example the focus was a great car, far better to drive then anything from Toyota(sans MR2), the GTO had style and was a good quality car.
Cars are more then just gas mileage and resale. I would rather drive a GM, Ford or Dodge that is lower build quality(supposedly,however in fact the are much improved in the last 10 years) that has style,and is more exciting to drive then a Toyota. I live in japan now but I hate renting from Toyota rental, all the cars are so boring I almost fall asleep just looking at them let alone driving them. Unless Toyota turns it around quick, they will put the whole world into a passionless hybrid driving world. Where is the passion??? excitement??

Would Boing Boing feel better if they put out a Chevy Steampunk camaro?

“It’s not capitalism that’s being discredited, but the hypocrisy of “big business” (and its reliance on rent seeking corporate welfare) that’s being exposed.”

surely large, rent-seeking corporations that take advantage of corporate tax breaks ARE the logical conclusion of free market capitalism? I don’t see how you can say it’s not the failure of capitalism or at least the form of capitalism that has dominated the global economy since the 80s.

I would like to say that we as Americans probably lived in the greatest country in the world. we landed on the moon, have some of the greatest minds in medicine and engineering and everyone in the world wants to move here. As the greatest country in the world why do we import 70% of the goods that we utilize? The answer is tax breaks to foreign countries for building plants and employing our trained work force, which to my recollection Toyota and BMW built plants in non-union states and did just fine with their trained work force. The unions need to step back and re-evaluate their role in our industrial society. We do not have the deplorable conditions of the early 1900’s because we have OSHA now. The federal government has been so gracious to mandate overtime after 40 hours of work for and individual worker. And what kind of training are they actually providing to Ford or Chrysler or GM. None and don’t let them tell you otherwise!

In conclusion I would like to add that if my company were so poorly managed on all levels, crappy product, crappy management, crappy production etc., i would expect to be closing my doors as well. Get ready for a new look in Detroit, anyone for sushi at break?!

I know they were stupid, but I have to admit that really huge vehicles were a guilty pleasure of mine. I have 5 brothers and sisters and we grew up riding in 5400 lb 8 passenger station wagons. For about 2 years I had a Suburban with a 454 Big Block. It’s a shame that future generations of males will have to grow up without the pleasure of burning smoky donuts wit ha 3 ton truck in a K-Mart parking lot and beating it before the cops arrived.
GTA just can’t replace that experience.
Looking back, it was a little like having DDT, Dynamite and handguns for sale over the counter at the hardware store. We survived, but you wonder how.
30 MPG efficiency and $.30/mile cost are my goals now. I wouldn’t go back, but damn a ’76 Sedan De Ville was a fine ride.

But I didn’t I didn’t see a bunch of senators hectoring the executives of Goldman Sachs for arriving at Congressional hearings by private plane instead of bicycling or hitch-hiking or riding a Greyhound bus. And I won’t see twenty-eight times as many cutesy mock-ads decrying their bailout, will I? No, it’s not that anybody in power today cares about the money. They just calculate that if Washington deliberately lets the hedge fund crooks drive Detroit into bankruptcy, then it will break the UAW. From their point of view it’s well worth permanently destroying a half-million U.S. jobs if they can wreck a big labor union in the process. They don’t know anybody who works in a factory, after all.

Nobody should have been bailed out. That’s the problem. More bailouts isn’t the solution.

“Permanently” destroying jobs is rhetorical nonsense. Better jobs will be created when other/new companies buy up that capital and labor force to put it to better use. The fact that this can’t happen until the “big 3″ go bankrupt is the problem.

The role of government isn’t to cater to the auto industry, or the UAW, or any other special interests — only the individual citizens (i.e. the tax payers).

But honestly, can we afford to let them fail?

We can’t afford not to let them fail.

With unemployment skyrocketing, can we afford to lose the millions of jobs wrapped up in the manufacture, sales, support, and supply of American automobiles?

We can’t afford to keep capital and labor tied up in dysfunctional failing businesses just because people are afraid of uncertainty.

I’m sure Toyota is shaking in their collective boots that some dude who thinks a Ford is quality engineering finds their models “boring.”

I’ve been driving a Tacoma for the past 8 years and over 140,000 miles and I’ve never had to experience the excitement of “paying for repairs” in the shop. Not once.

I share your enthusiasm that Toyota can “turn it around” and make a car actually worth owning.

GM needs a swift kick in the bearings. They’ve been trailing foreign ideas and engineering for over a decade. If it costs a few Bil to show them the door, then let’s get started. Can’t happen soon enough.

But aside from all of that, aside from the politics and the moral conflict that I have, there is something MUCH more important, and that is the livelihood of a lot of hard-working individuals. A livelihood that needs to at least be kept alive a while longer so that they can find OTHER jobs (or at least try) so that they can feed their families if the big three do fail. I would give them 15 billion even if I KNEW they would fail, just so some kids in Detroit could eat.

The management has agreed to take pay cuts and do some restructuring, UAW has agreed to make major concessions, and the government is set to give them in the neighborhood of 2.5% of what they gave to the banking industry in the form of a blank check.

This is NOT about an AMC Pacer (AMC, a company that was allowed to fail and be swallowed up by other companies, mind you), this is about a reality that many Americans are simply unaware of and willing to make light of.

re: “Additionally, I don’t understand why these companies should be delay the inevitable: bankruptcy protection and restructuring….I will never understand why the big three aren’t considering this as an option.”

The talking heads I’ve heard/read on this topic say that customers won’t make such a large purchase from a company that they don’t trust to be around in 3-5 years, when they need service or when something unsafe is discovered and a recall needs to be issued. I don’t know how true that is, but buying a car is unlike buying any other product or asset for most of us…a big, big purchase that we expect to depreciate. I know a lot of people buy cars for silly reasons or make choices for no good reasons at all, but some would no doubt take bankruptcy status into account when deciding on brand.

I can see where someone would take a cheap shot like the graphic above, and it is technically fairly well done (as far as the ‘shopping skillz). But the text included betrays a real small-mindedness and a lack of understanding of the issues involved.

I won’t go into the ins and the outs of what the big three have done to improve quality control and design over the last ten years. Rather I would encourage you to investigate for yourself on some of the reputable sites out there. (Autoblog is a good one). It is an unfortunate consequence of the mistakes of the past that the accepted(and I would argue incorrect) sentiment out there is that foreign cars are “just made better”. The fact of the matter is that the cars being produced today, AND the cars that are slated for production over the next three years, are some of the best in 25 years.

I would lastly make the point that the lobbying claim is a straw man argument. It’s a claim based on no evidence whatsoever, but put forward with the idea that by definition all lobbying is bad. It lowers the level of discourse and reinforces negative stereotypes.

Lost sight in all of this is the fact that what is being discussed is a bridge loan. Money that will be paid back, with interest, to the U.S. Government. In a good economic climate, there would be the possibility of raising that amount of capital via the private sector, but with the credit lines frozen as they are, the government is the only entity capable of making such a loan.

Clearly, I was mildly offended by the graphic above. Not because I disagree with the “outrage” expressed (I think that controls need to be put in place to ensure that the money is used correctly, unlike, say, what was done with the financial industries) but because I feel that it is intellectually lazy. Bumper stickers may get a reaction, but they don’t actually solve anything.

And I’ll continue to think that anyone who does is slightly gross and ethically challenged. “Economy” remains less important than Biosphere, sorry.

Regardless, it seems like the auto industry is being used as a strawman to distract from the enormous crime the banks just got Congress to commit on all of us and our great-grandchildren. I have this nasty feeling deep inside every time I think of it, like the children of the people behind Hitler just had all their wildest dreams come true. Creepy and awful.

This post kind of jerky. Yeah, the auto industry’s business model is effed up, but does that mean we’re gonna tell the midwest to go screw themselves? ‘Cause this is not just Detroit. (And even if it was, that would be enough, IMO, to step in. You don’t abandon a major American city. See: New Orleans.)

2.5 million people are directly employed by the American auto industry. Millions more depend on it for indirect support. (Not just suppliers, but restaurants and other local businesses.) Do we want these people to default on their mortgages too? Do we want them collecting unemployment?

The short term satisfaction of telling GM to “suck it” is not worth the long term strain of supporting another several million out of work Americans and the irrevocable loss of our manufacturing base.

What they made 30 years ago is 30 years dead. Congress is playing to the crowd. Everyone has a bad car story, but the truth is, the current crop of cars is amazingly better than the clunkers they made during the 70’s-80’s.

Every damned company is failing right now. Even the “good” car companies like Toyota and Honda are falling. Why? NO ONE IS BUYING CARS. There’s a depression going on! If the stock were everlasting friction-free zero-point energy powered flying cars, they still wouldn’t sell, because people stop spending money when the financial markets blow themselves up and mass unemployment ensues. “Depression”.

And as for the horrible unions, the 70 dollar an hour canard has been debunked for weeks, to no avail. They’re adding in all the pensions and all the survivor payments and every damned cost related to labor, and dividing by the number of hours worked today by the current force.

Here’s a fact: only five percent of the cost of your new car is labor.

Five. Percent.

If you replaced all the union workers with migrant laborers from Somalia, your $20K car would cost about five hundred dollars less. If you used prison labor for free, you’d pay a thousand dollars less. That’s a price reduction from $20,000 to $19,000. Yeah, that thousand dollars, which pays for millions of jobs, THAT thousand dollars is keeping people from buying cars.

The cost of a domestic manufacturing industry is five percent of the cost of your car. That’s less than the sales tax.

Sony is firing people now. I’d imagine Toshiba, Samsung, and a thousand “good” companies are about to blow up, as well.

Please, stop with the nonsense. We’re in a depression caused by the Smartest Men in the Room playing games with fake money to make themselves wealthy. Those men are doing fine. They’re about to buy the car companies for a penny on the dollar. It’s good to be the kings. They’re also being given seven trillion dollars to buy you up with. On your credit card.

There’s a theme when bad things happen, somewhat perpetuated by a legal system based on extreme adverserial pronouncements to garner results — Bad people make bad things happen. Good people suffer. That theme runs through many threads here. Maybe, people do the things people always do, and they lead to good things sometimes, and sometimes to bad things?

Yeah but you can import a Toyota from anywhere and it will be obscenely boring. It will drive forever and ever and ever but who cares??? Give me a Neon SRT or something that is stupidly loud and breaks but gets my heart going. Give me a Z06, it might break but who cares? I wanna drive it, I wanna get in that thing and I wanna go. Name one car from Toyota in the last 5 years that is fun to drive and interesting. There are a tiny handful to be honest but they are so few and far between and everything else is just a bore.

However you did acknowledge my point these companies do build cool cars, even if they are imported or designed for other countries, hey they are global companies.

They should be held to the fire for building crap like such as SUVs for way to long, for taking to long to understand how to build cars well and for having little focus. Toyota has focus, they are focused on building boring cars that never break. However Ford GM and Chrysler are just like crazy chicks, they are bipolar but once in a while they do some crazy stuff under the covers. Of course we could just save the skunk works from each company and let them loose. they can crank out cool stuff and we can do away with the rest of it.

Just out of curiousity, when people are posting complaints about Unions, are they doing so after pulling a 16 hour shift? Have they enjoyed a weekend, benefits, a safe workplace? Have they been told by their employers where they can spend their money or had their families threatened for attempting to organize?

No?

You can thank Unionized labor for that.

Unions aren’t perfect, they’re big clumsy organization and the UAW is one of the biggest and clumsiest of them all. The big three and the UAW both perused a cut-throat approach for decades while non-american car makers swept into the market. “Let’s you and him fight”. The big three could have reached out, the UAW could have been less adversarial and more aware of the way the wind was blowing. Lots of arrogance and obliviousness to go around.

But saying that “unions are the problem” is simply mistaken and pejorative. Unions gave this country the middle class and have allowed generations to get higher education, buy homes and, have a higher standard of living. There’s always room for reform, aggressive reform at that, but the baby and the bathwater don’t go out together.

The “there are no atheists in foxholes” cliche does nothing to support the existence of a deity, but only serves to illustrate wishful thinking.

It’s not capitalism that’s being discredited, but the hypocrisy of “big business” (and its reliance on rent seekingcorporate welfare) that’s being exposed.

Unlike human beings who die if they fail, corporations merely dissolve as legal entities and other firms buy up their assets at discount. The failure of Ford, GM, and Chrysler to marshall economic resources will be quickly recovered by Toyota, Honda, and Nissan.

Like the “immigration problem”, this is mostly xenophobia and trade union politicking in disguise.

“I’ve been driving a Tacoma for the past 8 years and over 140,000 miles and I’ve never had to experience the excitement of “paying for repairs” in the shop. Not once.”

I frequent the CarTalk message boards, answering questions over there. Do you know how many Toyota front wheel drive automatic transmission complaints are in there? You can’t turn around without reading them. In fact, Toyota’s quality ranking has been slipping consistently.

A friend of mine drives a Ranger with similar statistics as what you report. I hate to say this, but you are taking what is -unfortunately- a very typically narrow American point of view here by only seeing the stereotype that you have formed and/or bought in to.

I find it very interesting that people who generally consider themselves enlightened and knowledgeable of a world beyond their own locale (the people who generally make BoingBoing a treat to visit) fail to realize that the things that they like and buy in to are not really “special”.

People tend to miss a very important point, the US Government isn’t BUYING anything. They are issuing loans to prevent the possible loss of upwards of 2.5 million jobs.

This isn’t the first time the government has made loans to keep a car maker afloat, it may not be the last.

As for the quality of their cars? Ford wanted to go the economy route, but the American market DEMANDED SUV’s and so they continued to make big vehicles. It is all fine and dandy to shout “Where are our hybrids”, but it is too easy to forget that until gas started climbing past $3 a gallon, the average American didn’t give a damn about fuel economy.

Has there been mismanagement? You bet, no argument, the ticks at the top should go. But let’s put this into perspective.

President-Elect Obama’s job plan includes creating 2 million “green jobs” that cannot be outsourced as a way of helping to tackle our nation’s unemployment. 2.5 million could lose their jobs because of the auto industry.

The math is really simple. Yeah, it is easy, and proper, to be indignant about the jerks at the top who have been sucking these companies dry. Personally, I think the companies should be allowed to go INTO bankruptcy before any loan is made so that the Bankruptcy judge can nullify any executive contracts and get folks out the door.

But the constant whining about how we are GIVING money away by people that don’t have the most basic grasp of the actual situation has REALLY been grating on my nerves.

I own a Honda and a Toyota, but I have to say, the American car companies don’t get enough credit. They’re paying over $2,000 more per car in labor costs, and even with that they’ve managed to improve reliability and features enough that they’re nearly competitive at the same retail price.

Of course, nearly competitive is not good enough. Unless a consumer is a “Buy American” or “Buy UAW” ideologue, there’s no reason to step down to a car that provides even 99.9% of the value of a foreign-owned (but US-made) car brand.

That said, getting 95% of the way there with 90% of the money indicates better overall efficiency at turning money into cars. If we can get the present management out from under the poison pill contracts that were put in place decades ago by management long gone, I expect that hard-won efficiency to produce some very nice cars indeed.

Ahh, yes they can. They’re lying with statistics.
“Labor cost per hour, wages and benefits for hourly workers, 2006.”
These costs include benefits for retirees which outnumber employees at GM more than 2 to 1. When things were good, the big 3 didn’t set aside profits to fulfill the obligations they agreed to. In 2008(!), GM distributed $300m in dividends. They’ve been throwing $1.2billion in dividends at their investors for years (up until 2006 when they halved it to $600m). Quite simply, crappy short sighted management fucked everyone over.http://www.businessweek.com/the_thread/economicsunbound/archives/2005/07/why_gm_is_so_op.html

Yeah, I hated on Toyota and other Japanese automakers back in the eighties and early nineties, I liked my Pinto (yes Pinto!) and 72 chevelle.

My mom bought a brand new Mercury Zephyr in 1983, the last year they made them, so you’d think they got it right? Nope, the piece of isht fell apart before it even had 80,000 miles on it. In 1988 my live in girlfriend bought a new Mustang, she got the four cylinder so it would be good on gas. My Pinto was more fun to drive and the Mustang fell apart by the time it had 90,000 miles on it.

In 1992 I bought a used Toyota Corolla wagon for $700 to use for my startup painting business. It had 170,000 miles on it so I figured for that price if it fell apart in two years I’d be ready to buy a truck. Long story short, I drove the crap out of it, carried 40 foot extension ladders tied to the luggage rack, kept it loaded down with a few hundred pounds of stuff all the time, hardly ever changed the oil (maybe every 12,000 miles, what can I say, young and stupid). I drove the car for three years and put another 60,000 miles on it for a total of 230,000 miles. It never, ever needed repairs of any type and that was with a totally stupid lack of preventative maintenance.

I sold the above Corolla wagon to a family of Mexicans for $ 600.00 in 1995 and I bet they are still driving it. The Pinto bit the dust a long time ago, as did the Zephyr, the Chevelle, the Chevy truck I owned, the Dodge truck I owned, and the Ford truck I owned.

It should come as no surprise that 4 years ago when I could finally afford a new car I bought a 2005 Scion Xb; it’s hard to beat the 37 mpg average and lack of repair bills, though now I do have an idea what preventative maintenance is. In 2006 I gave that car to my girlfriend and bought a 2007 Yaris sedan. Again, it’s hard to beat the 38 mpg average and the lack of repair bills (the Yaris already has 60,000 miles on it, so far only oil and such)

American automakers passed off crap for too many years and lost a lot of customers. Maybe they are better now, I don’t pretend to know, but I bought enough crappy ones built between 1972 and 1989 to know they almost all sucked during that time period.

Too much time passed; we lost faith. Now all they have to grab our interest is cars styled after the ones they built in their heyday (see Dodge Challenger, Chevy Camaro and Ford Mustang) over 30 years ago. And blatant rip offs of Japanese ideas (see Scion Xb next to a Ford Flex, they’ve even practically ripped of Scion’s marketing campaign)

“The big three could have reached out, the UAW could have been less adversarial and more aware of the way the wind was blowing. Lots of arrogance and obliviousness to go around.”

Agreed, and if you read my first post, I’m careful to say that I’m loathe to say anything bad whatsoever about the union concept.

But what “reaching out” is left to do on the part of GM when UAW contracts mandate that GM must maintain an insane business model. At what point does someone step in and save the working class from a “union gone wrong”?

And believe me, I come from and still largely am part of a family of blue collar people who avoid being shat on by employers because of strong union presence.

The problem isn’t only the auto industry, it’s the overall lack of credit, which came not as a gradual throttling back, but an abrupt floodgate being shut. Yes, the auto industry needs a major overhaul, and possibly a Chapter 11 reorganization, but NOT at the same time as every other major industry in the US getting hammered. The economy is in the position of some poor schmoe who found out his car needs an overhaul, the kids need braces, and the roof is leaking, all within the same week. Let’s not add more stress to the system just because you want to see it break, without considering the consequences.

Give me a Neon SRT or something that is stupidly loud and breaks but gets my heart going. Give me a Z06, it might break but who cares? I wanna drive it, I wanna get in that thing and I wanna go

Congratulations,Damageman: you win today’s Short-Sighted Selfish Consumer award. I can’t fathom thinking like this, especially in a time when climate change and the economic crisis are all you hear about.

If/when I finally have to break down and buy a car it will probably be a used Honda; something that’s already depreciated and I know will survive for some time. Until then, its Autoshare and public transit for me. I like fast vehicles, but for the sake of this planet, I keep my gas guzzling to video games.

Ford, GM, and every other auto maker have sold Americans something that they just do not need: The ability to pay through the nose for the potential to go anywhere with anything, while in reality only using it to commute to/from work.

So you’re comfortable using one companies financial statements as a proxy for another? Are you INSANE?

We are dealing with three different companies and to assume Chrysler is in bad shape, because they tell you that they are, without any public proof is simply idiotic. Note, in the section I quoted there is mention that little things like. liabilities and executive compensation are kept secret. You would through money into a black box, looked after by a wall st private equity firm.

Everyone else’s books are open, why does Chrysler get off? Why should Ceberus Capital get a free ride, while GM is forced to bare it’s guts?

If you’re going to give money on faith and proxy, then I have bridge for you.

But I like the concept.. Lehman and Goldman were in the same business so I should use Goldman’s financials instead of looking at Lehmans. So are Airbus and Boeing.

This is about this ludicrous bailoutapalooza going on. If you’re an American, you are going to pay up for saving the automotive industry and the banks. And for a wholly gratuitous war in the Middle East. And for a futile war on drugs. And for a prison population that per capita is tenfold what is is for the world as a whole. And you won’t be able to afford health insurance, like the people of Cuba.

Oh, and before I forget, you’re going to pay through the nose for gas.

I think I would be much more willing to buy a car from a GM in chapter 11 than I would from a GM in its state today. The chap11 GM would at least look like it stood a chance to be around till the warrantee was up. Anybody that spent a minute thinking about it would agree.

I like the ad. It’s funny ’cause it’s true. Not 100% true of course, but truer than you’d think.

I’ve owned 5 brand-new Saturns (GM) in the past decade and I’ve liked every one of them. I have no reason to hate on US car companies or foreign car companies, but you’d be foolish to ignore the impact of lobbyists in Washington and the essential violation of free market principles that we are seeing.

If people don’t buy a business’s product, then eventually that company should go under. They should not get a bridge loan that is taken from the same pockets as the people who tried to “vote with their feet.”

Oh, I guess all those other/new companies buying up capital & labor force to put it to better use is why unemployment is growing, and why the number of “underutilized” workers jumped 60% last month.

Because we’re having a bust that’s correcting for the malinvestment of the previous boom.

Creating another boom to offset this bust just makes the bust following that even worse.

Honestly, if your reasoning actually worked in the real world we’d have a close-to-0% unemployment in the country.

A real correction would look like three or four months of 15% unemployment. But afterwards we’d have healthy businesses that can afford in the long-term to hire back those people and more.

Deficit inflationary spending to keep the current broken system going only delays and compounds the inevitable — throwing good money after bad, as others have said.

We’ll never have 0% unemployment because that would signify an economy at stand-still. Unemployment rate is another way of saying labor in transition. The real problem is long-term unemployment (when people run out of savings and benefits)… which is what all this inflation in an attempt to prevent short-term unemployment will ultimately cause.

“We do not have the deplorable conditions of the early 1900’s because we have unions. The federal government has been so gracious to concede to union pressure and mandate overtime after 40 hours of work for the individual worker.”

Fixed that for you.

Also, ever notice how working conditions have been getting consistently worse since Reagan fired the ATCs?

Bombardier is heavily subsidized by the Canadian gov’t, just like Boeing, Airbus, and more. Subsidies are like continuous bail-outs, at least kinda, but without all the fanfare.

@ INDIEBASS

Regardless of the quality of Big 3 automobiles, and you’re right about what you said, the corporations have been horribly managed for the last 20 years (minimum). Failing businesses must be allowed to fail so that the incentives of the marketplace remain clear.

“Permanently” destroying jobs is rhetorical nonsense. Better jobs will be created when other/new companies buy up that capital and labor force to put it to better use. The fact that this can’t happen until the “big 3″ go bankrupt is the problem.

Just because your free market dogma says “creative destruction” leads inevitably to happy results doesn’t make it true. Look at the real world. The slump of 1929-31 was far greater than the current one. Lots and lots of companies went bankrupt. According to your theory, there never was a better time for “creative destruction” to work its paradoxical wonders. OK, what “other/new companies” bought up factories and unemployed workers in 1931 and put them to better use?

And the fact remains that GM isn’t going bankrupt because they spent the last decade manufacturing Tahoes instead of Corollas, as their customers so stridently demanded, or because UAW workers make $73 an hour, or $730 an hour, or whatever the latest lie the anti-union right are peddling this week. They’re going bankrupt because a.) the price of gas shot above $4.00 a gallon this summer, which murdered the market for gas-guzzling land-yachts overnight, leaving GM with billions of dollars of suddenly unsellable goods, b.) their prospective customers are all worried sick that they’ll be among next month’s half-million fired, or maybe January’s half-million, or maybe February’s half-million, so they’re sure as Hell holding on to their old clunkers and not buying any new cars this year, and c.) the big banks are no longer making short-term business loans at less than usurious rates, because they invested all their depositor’s funds in 60x-leveraged mortgage bundles, which are now utterly worthless, so now they don’t have change for the coffee machine.

It’s a funny fake ad but for hundreds of thousands of real human beings this is a tragedy and there’s nothing amusing about it. It’s fine to rail against the blinkered fat cats who mismanaged an entire industry, but if the Big Three fail the only ones who won’t be harmed are Management. The hurt will all come down on those with the least control.

There are hundreds of thousands of people in and around the auto industry who are sweating their own solvency on a day to day basis waiting to see if they’re going to take the fall. Bitter humor like this faux ad just heightens our anxiety.

Unless you really don’t care about the economic consequences for those people I don’t see how this humor can be considered in good taste.

I find it humorous that nobody has mentioned or appears to know about the Tier suppliers that will fail immediately after any one of the Big 3 goes down.
Do you think that the other Automakers will simply make more cars to pick up the slack? Probably not.
Do you think the .5M people that work in Tier suppliers will find work easily somewhere else in town? Probably not.

If you don’t have the ability to see the whole issue, you really can’t bitch about it. Complaining about the UAW is fine and dandy, but does nothing.
Saying that Toyota, Honda, and BMW pay half is highly speculative at best, since I don’t think those automakers are UAW ‘owned’ entities.

Call an automotive recruiter and get some facts people. This ‘bailout’ (which was a request for loans initially, but the popular media has strangled that truth out) if it doesn’t happen will mean that 1.5+ M people will be out of work.

Are you going to bitch about paying for their welfare after sentencing them to having no job?

If there’s one thing I miss from my days in Buffalo, it would be reading the hard copy of the Buffalo Beast over lunch at Mighty Taco. Well, two things…

However, back on topic.

@23 – the exception to the rule as far as Saturn is concerned is different than the big three. When you take into account the UAW’s actions against a pro-reform representative like Michael Bennett, it does not surprise me that the Union old boy’s network has come this close to destroying the whole thing.

I only know one person other than myself who has worked the locations presently being discussed (machine shop > #1 world oem parts manufacturer > primary assembly > moved to pure IT in a law firm). What amuses me is how many of the jobs that will be “lost” in the big are assumed to be union jobs held by the classic middle-age American with kids and a wife. Little does America know, the top little section of the pyramid is manned by this demographic, and downhill from that is outsourced to largely immigrant workers (illegals are a vast majority in Detroit) and so far and wide to ultra low-wage unskilled labor. I’ve been through plants in downtown Detroit that were 100% Mexican, plants in the middle of cornfields in Ohio and Indiana that the local farmers work at to get health coverage, plants all up and down the east coast using a mix of un-insured cash only labor and highly payed technicians to keep the automation systems running. The common denominator is that they all make parts for more than the USA auto makers – they will survive at much reduced capacity for years until the business shifts in more from the foreign owned car builders.

And yes, I’m an IT worker (albeit white collar, which is not the norm). I represent the largest demographic in this great nation of ours, and I assure you this industry will hurt just like any other right now.

I think it’s interesting how people claim that no one will buy cars from a manufacturer filing for bankruptcy. Who exactly will buy a car from a company who’s CEO is in DC on his knees in front of Congress begging for handouts to “save” his company from sure ruin? How is this less disturbing than a quiet filing of chapter 11, and a shift of manufacturing priorities to 1 or 2 main brands, throwing a couple dozen crap models into the ditch and sticking with strong performers? I really don’t see the arguments as valid here.

Regarding quality, performance, reliability, general sexiness etc – I heard my great grandfather, grandfather and father all rue the failure of the auto industry back in the 80’s when all the 1970’s era cars were literally staining the driveways of our nation a rich mix of brown oil and rust. They all kept buying American as good hard-working blue collar union men are wont to do, but they all knew that brand loyalty was shot, and couldn’t be regained without a revolutionary and sudden change in the Big 3. I am now in my 20’s and won’t ever be motivated to buy an American car as long as I live, as far as I can tell. Unless Google buys Ford and they make an Android Car love-child, I don’t see any of our car makers being desirable again. And that would have to be one stunning love-child.

Consumer Reports (January 2009) rated 18 “family sedans” in $20K-25K range. They mark 12 of these as “recommended”. Three of these 12 are in fact American made (Ford and GM) and all three scored well in predicted reliability and safety. Does any other objective data appear in response to this post?

“But the constant whining about how we are GIVING money away by people that don’t have the most basic grasp of the actual situation has REALLY been grating on my nerves.”

We’re “whining” because since the 1980’s the big three have promised reform, the UAQ has promised reform and it didn’t work. Even at the height of credit mania GM, Ford and Chrysler were in trouble. Ford was so desperate sold the rights to the blue oval back in 2006 when there wasn’t a subprime cloud in the sky.

Jobs will not be saved. The UAW has lost over 1 000 000 members since it’s peak. Detroit also. People will not suddenly wake up and reverse 30 years of not buying American cars. More plants will close, the rust belt will get rustier.

We can do this now or we can have it drag out over years and years. Let us remember the estimated $114 billion retiree liabilities that ever shrinking 3 have. And there will be even more liabilities as time goes on. It will not be a one time cash infusion. This will be the start of a hugely expensive, ultimately futile waste of money.

How much do I have to pay to put everyone on unemployment if all three companies and all their ancillary suppliers (3 million people total) go down? Cause apparently I’m on the hook for 25 billion now and that doesn’t get me squat but fake contrition and vague plans. Perhaps, we could put the money to work in other better ways. Things need to change, soon and in massive ways.

I hate to sound all motivational, but the cheese has moved. It is time to find more cheese. It is not time to get government cheese.

Yeah, I think the broken window fallacy certainly applies here. Giving phantom money (as well as real taxpayer funds) to prop up an economy of illusions is ridiculous. Millions are going to suffer anyway; many of these businesses will fail regardless. The suffering of the many might be deferred, but others will suffer in the meantime.

The market needs a serious adjustment and we need serious reform of our economic system, not an idiotic giveaway of trillions of dollars (mostly borrowed itself) to keep a failing system going. Our way of life is untenable. Until enough people realize that and participate in genuine change, all we will do is dig ourselves deeper into an early grave. All the bailouts do is create the conditions for even more suffering later.

Additionally, I don’t understand why these companies should be delay the inevitable: bankruptcy protection and restructuring. Chapter 11 allows a company or individual to restructure their debts and develop concrete plans to become viable again. I will never understand why the big three aren’t considering this as an option.

Sure, people will lose jobs. Some pensioners will lose their health insurance and benefits. However, if the company remains afloat afterward, these things can be phased back in.

A friend who works for the trucking industry is voting this week on a 10% pay concession. The main difference between the UAW and the Teamsters is this: the Teamsters have a better grip on the implications of NOT conceding, and they’re more concerned with the futures of the companies, not the workers per se. In addition: they had a major meeting last week, locals found out over the weekend, and they’re voting this week. Has the UAW EVER worked that quickly on ANY concession talks?

Do you think that the other Automakers will simply make more cars to pick up the slack? Probably not. Do you think the .5M people that work in Tier suppliers will find work easily somewhere else in town? Probably not.

The economist Joseph Schumpeter popularized and used the term to describe the process of transformation that accompanies radical innovation. In Schumpeter’s vision of capitalism, innovative entry by entrepreneurs was the force that sustained long-term economic growth, even as it destroyed the value of established companies that enjoyed some degree of monopoly power.

Damageman – I’m not arguing for Toyota. I just thought it curious that the two examples held up were essentially imports. Focus was built here, but where was it designed?

This is essentially a design issue. Customers are fickle – gas hits 4$ they want nothing to do with big trucks. GM, Ford, Chrysler let the customers lead them, and showed no design leadership. Toyota got into big trucks, but they still offered decent small cars, and invested continuously in the design of their cars at all sizes. Look back at how many design revisions the Corrolla has had since its inception. Then look at Chevy’s comparable cars, they have not kept up. The same with Ford. The Focus in europe is a full generation ahead of the Focus sold here, and Ford has failed to bring the improved car to the states, meanwhile Honda, Toyota, and even newcomers like Hyundi take their market share.

They’ve made their bed. I have no idea what the answer is, but no doubt they put themselves here. The customer is always right is a fine sentiment, but when it comes to planning new product you have to be ahead of the customer, tempting them to your new product – you have to write the future. They pandered to their customers and the status quo, and eventually got left empty handed.

Jenda of http://www.prosandcons.us here.
I own one Ford, and the quality is indeed excellent, but CAFE standards force the big 3 to build a HUGE number of small and mid-sized car models they cannot sell.
They would not be in the position of British Leyland if they could have pared the mind-numbing plethora of small and mid-sized vehicles no one knows about and focused on their money-making vehicles instead. Bad enough CAFE killed off the station wagon for 20 years and gave us all SUVs, then it forced incredible spending on a car sector where foreign companies are just plain better.
And yes, there are all the union issues too. When I was little, Oshawa Ontario, where I lived, was a car manufacturing Mecca. Then the government picked up the health care tab and they STILL lost almost all their automotive manufacturing jobs as the union refused to adopt flexible work rules. So much for supposed salvation by socialized medicine.

So it’s ok to giggle as tens of thousands of IT, bank staff and other white collar professionals get fired without any benefits or compensation. It’s ok for trillions of dollars to be wiped out by the destruction of the Investment banking industry, but to ask that auto workers suffer the same..

“But is that justification for a bail-out? Not at all. The United States created Chapter 11 precisely to help companies that need protection from their creditors while they restructure their liabilities and winnow out the good business from the bad. If the North American businesses of GM and Ford filed for Chapter 11, their activities elsewhere would be largely unaffected. Even in North America, their businesses could continue to make vehicles as they shed costs and renegotiated contracts.”

We are not asking to be allowed to bulldoze rust belt and plant trees on the ruins of detroit (something that is happening anyways), we just want to stop throwing good money after bad.

I frequent the CarTalk message boards, answering questions over there. Do you know how many Toyota front wheel drive automatic transmission complaints are in there? You can’t turn around without reading them. In fact, Toyota’s quality ranking has been slipping consistently.

A friend of mine drives a Ranger with similar statistics as what you report. I hate to say this, but you are taking what is -unfortunately- a very typically narrow American point of view here by only seeing the stereotype that you have formed and/or bought in to.
________

I find it odd that some guy who reads complaint threads at some random car forum gives negative stories more credit than a silent, satisfied majority. At least I’m basing my opinion off of ownership of two different models and engine classes of Toyota over the last 12 years, with a repair total that comes out to less than 1/15th of the cost of purchase.

I don’t think it’s “special.” It’s “what I paid for.” The sad reality is when Americans view a product of engineering that actually holds together and functions accordingly as “special.”

I’m saddened that the UAW is considered the bad guy/fall guy in this developing crisis, but i also find it peculiar that Toyota’s quality control seems to be statistically dipping once a larger percentage of their models are being produced stateside.

#28
Have you been to Michigan lately? Because a lot of people there are out of work, not because they work in the automotive field, but because they are connected economically to it. This thing has real tentacles and you can say let it fail, but be ready to pick up the pieces and realize that the bulk of the damage will be to people that had nothing to do with the problems of the auto industry. Talk to people in fields as diverse as radio or health care about what this is doing.

Oh Boys! America is not the world, other car manufacturers are also going down on their knees. Mercedes, Audi, Volkswagen, Peugeot and BMW send home over 120 000 worker during the christmas time.
Be smart sell your RAM buy a smart ;o)

Philosophy is great for people that aren’t tied to the MESTian world, but these people are only concerned with money. Less than 1% of those that will lose their jobs are astute enough to ‘pull up the boot straps’ and move on to find work. These people will believe they are in ‘stasis’, freaking out, eating the food their minds will be feeding them. They will believe they are done.

If you can’t make growth profitable, the money hungry forces driving the industry won’t pay any heed to your concerns.

“Not once did Nardelli ( Ralph Nardelli CEO of Chrysler, recently kicked out of Home Depot with a massive golden parachute, after failing there) disclose any of the historical information found on a customary set of financial statements. There was nothing about total assets or liabilities, year-to-date losses or cash flows, let alone pesky details like deferred compensation that might be owed to Chrysler executives.

Nardelli did hand the committeeâ€™s members a lengthier presentation, which he asked them to keep secret because it is â€œcompetitively sensitive and proprietary.â€ If he wants to sink Chryslerâ€™s foreign competitors, perhaps he should encourage them to copy his companyâ€™s plans.

A Chrysler spokeswoman, Shawn Morgan, confirmed that the secret package didnâ€™t include the companyâ€™s financial statements, audited or otherwise. She said the reason Chrysler doesnâ€™t divulge such information, or the names of its board members, is â€œbecause weâ€™re a private company.â€ A spokesman for Cerberus, Peter Duda, gave me a similar answer. When taxpayers rescue an outfit like Citigroup Inc., at least we know whom to blame. “

If only financial products were as easy to understand, we could have a similar ad blasting Lehman Brothers, Merrill Lynch, and Goldman Sachs for putting terrible debt into sexy new Securities, leveraging themselves until there was no tomorrow, paying themselves like railroad barons, and then, when the bottom fell out of what seems like an AWESOME ponzi scheme to me, getting $700 billion in bailouts. I wish I had bought a car from the big three rather than investing my retirement in a fundamentally corrupt system.

I used to work as a car salesman a couple years ago. I sold GM, Pontiac and Chrysler so I know these cars inside and out. Here is the problem: long term reliability.

In a recent consumer reports survey of car owners, of the 62 most reliable cars of the last ten years exactly four of them were from American companies. One of them was the Pontiac Vibe, which was just a Toyota Matrix re-badged, so in truth only three of them were REAL American cars.

Long term reliability is important because of our children. We tend to give teenagers old, high mileage cars. We have an entire generation of consumers now hitting 30 who grew up driving Toyotas and Hondas because the American cars were just not aging as well, as the Consumer Reports survey suggests. Those who did drive cars from the big three often found themselves with more problems than their friends with more reliable cars so they moved from the big three to Japanese cars when they could.

Ford, GM and Chrysler can talk all they want about improving quality, and since I sold their cars I know that they have produced some good cars. But overall their brand image has been so damaged that it will take another generation before they can repair the damage. Lincoln was the highest ranked American company in a recent survey (http://www.usatoday.com/money/autos/2008-10-23-cr-reliability-ranking_N.htm), but at 11th that is hardly respectable for a luxury brand.

We may have anecdotal evidence of good American cars that we bought, and that is fine. We may also find that an American company will do well in “initial quality” surveys, which means someone looks at it and says it looks nice. But the real test is over the long term, the very long term. Are kids falling in love with the hand me downs they get from their parents? Is that first car they are getting when they are teenagers helping them fall in love with a brand?

The big three has lost a huge chunk of Gen X and Gen Y, and that is a hole that is hard to dig out of.

Excuse me? Did I miss something, Where the entire industry has a market cap of US $197 billion, (which is smaller than walmart or microsoft), and the ever decreasing 3 are but a fraction of that?

I’m sorry, but the ever decreasing 3 are but a small fraction of the $13.8 trillion dollars that make up the US economy. The apocalypse is happening right now, that’s why it’s called the rust belt. Face up to your ultimate insignificance.

I admit to reading only through the first twenty posts or so. When the first one blaming the customer came up, it got me riled up.

Poor ol’ car industry has been forced to make inefficient crap because that is what the customers wanted. Damn them for wanting such detritus.

Give me a break.

Large firms employ marketing professionals to sell their product.
These people get paid lots of money in order to mess with the heads of the general population. For the most part, free will is an illusion, especially when these professionals are involved. They know how to press your buttons and influence your decision processes in favor of their respective customer. They have the ability to make otherwise intelligent people stupid.

Blaming the customers in this case is like blaming a victim of a con for being gullible.

#3, What in hell are you smoking dude? Sure the GTO was a great car, back in 1965, 1966 and 1967. How long ago? And how many of them were on the road, even then? Not many.

And it was fun as hell. I learned to drive in a ’67 convertible and drove it all through high school. Big fun, back when gas was cheap as hell. But part of the fun was how unusual it was. The thought of everyone back then driving beasts like that? Carnage central. They were dandy at accelerating, the best. And if you were careful going around corners, they handled okay, but they fishtailed like a sonofa bitch.

And even for fun, speaking as one who spent her formative automotive years behind the wheel of John Delorean’s first baby, even for fun, I’d take a nice little Miata in a heartbeat.

From the little I can research at the moment, the percentage of car price paid to labor was as high as 10% before the unions conceded givebacks on their contracts. Now the figure seems to be from 5% to 8%.

“The total labor cost of a new vehicle produced in the United States is about $2,400,(2) which includes direct, indirect and salaried labor for engines, stamping and assembly at the automakersâ€™ plants. ”

(2) UAW Research Department, based on hours-per-vehicle data from the 2007 Harbour Report and labor costs as reported in the companiesâ€™ 10-Ks

Southern, right-to-work culture warriors like Jon Kyl are endlessly saying that legacy costs are what is crippling the Detroit automakers, and that they are rendered “uncompetitive” by union members who cost $73 an hour. It’s a lie, and Bob Casey finally called them on it:

“The labor-cost gap with foreign transplant operations will be largely or completely eliminated. OK? So, it’s — I think it’s important to put this information on the record for this hearing. And then we’ve heard this garbage about 73 bucks an hour. It’s a total lie, and some people have perpetrated that deliberately in a calculated way to mislead the American people about what we’re doing here. It’s a lie, and they know it’s a lie.”

“Which are guaranteed by the Federal Government, namely you. You want The Big Three to pay those retirees out of future profits or you want to pay them yourself through your taxes?”

It appears I’m paying for them either way. Do believe in 4 months it’ll turn around? Do you think that this is a one time cash call?

Let’s say your prediction of a 3 year turn around is correct. We’re giving them $15 billion every 4 months so we’d have stumped up $135 billion by the end of it with no guarantee that we’ll ever see a dime back. (I disapprove of TARP as well, but that’s another story).

Moreover, this is what kept Japan in it’s lost decade. Loan after loan after loan to Zombie companies. Uncompetitive companies, making uncompetitive products, bleeding cash, under crushing liabilities. We can avoid the same mistakes.

The Focus is a piece of junk. Every model year since it was introduced in 2000 has had tons of electrical problems. If they have been making cars for over 100 years, you think that they would have a way to design an electrical system.

Every consumer product company is in trouble. The big ticket ones especially.

There is no credit. No money is moving.

Not many people are buying; only the well-off are spending freely.

The majority of the country is not well-off. So sales are plummeting. One quarter of this, and bankruptcies start up. Except for consumers, of course, who had that power restricted in 2005 at the behest of the credit card companies, as you all may recall.

This is called a depression. We’re just smacking away on those we hate, while letting the guilty – those who caused this all – walk away with seven and a half thousand billion dollars.

Do recall that the financial engineers flew to Washington on private jets to get their free money, and not one person in the media or Congress noticed that, or the fact that they spent some of the bailout money on their bonuses.

“My first car was a Gremlin, no dash lights GM headlight switch, bad rheostat)one headlight (probably burned out)Speedometer didn’t work (Ford/Autolite guages) Starter didn’t work. (Ford Starter)I’d park it on a hill to get it started… It was fast though(AMC/Continental 258 I6, Ford ignition system, Delco charging system.) Keep in mind this was an entry level car which was likely poorly maintaned from the get-go and was likely 20 years old when it was driven like this. AMC built a robust car with plenty of quality control kinks (think Rambler…) The fact remains like a lot of the cars of the 70’s era, they fell apart over time. As a professional mechanic, I chose a Toyota 4wd v6 truck so I wouldn’t have to work on it. Other than routine mainanance, it has never once failed. In 276K, I have now done two timing belts, one clutch, one power steering pump, two sets of ball joints, 1 exhaust system, 1 set of shocks (by choice.) This truck sees the worst of conditions, gets worked well over it’s capacity and is off road (serious trails, not dirt roads) here in Colorado regularly. Personally, I would not choose to own a newer American automobile, nor would I reccomend a customer to buy one. It is sad, but the interest of the US manufacturers is simply to make money. They expect their cars to last 100K and that’s fine for them. I could not in good faith ask a customer to purchase an automobile that will likely last 1/2 the amount of time as a similar import. That being said, I would never reccomend a customer to purchase a used automatic of any kind because most are not taken care of properly. If the US manufacturers would look at their own brands from out of the US,(European Ford, GM) they would find a much higher level of satisfaction in those cars sold abroad than we do here. Hopefully these guys (and the unions) will wake up soon and realize the days of blind money grubbing are over, and they now must actually have to compete for a buck.